• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Celebrating Financial Freedom

THE Christian Personal Finance Blog

ARE YOU READY TO PROSPER? GET UPDATES
  • Home
  • Blog
  • Get Started
  • ToolsYou Need to Succeed
  • CoursesThe Divine Art of Money
  • Budgeting
    • Budgeting Worksheets
    • Premium Worksheets
  • Hot Topics
    • How to Get Out of Debt
    • How to Start Investing
    • Manage Money Better
    • Biblical Wealth and Prosperity
    • Real Estate Investing
    • Money Making Ideas
    • Credit Cards
    • Giving
    • Living Paycheck to Paycheck
    • Marriage and Money
    • Money Behavior, Mindset, and Habits
    • How to Make a Life Plan
    • Desperation and Hope
  • Start a Blog6 Easy Steps
  • About Us
You are here: Home / Manage Money / Cars / How Not to Finance a Car

How Not to Finance a Car

By Jason Cabler on January 31, 2012 11

1912 shares
  • Share
  • Tweet
How Not to Finance a Car

Ever had to finance a car?  When it comes to financing a car, there are good ways to do it, and there are not so good ways.  I’m going to tell you a little story about my very first experience financing a vehicle. I'll show you what it taught my wife Angie and I about managing our finances, and how we eventually started paying cash for our cars.

We Had to Finance Our First Car

About six months after Angie and I first got married, we decided we needed a new car.  So we went to the dealership and talked to the salesman, and in a few short hours drove off in our brand new Mazda 626.  We thought we got a good deal, but after I figured out how much extra we paid to finance that rapidly depreciating hunk of metal, I realized that we got hosed.

Not that the sales person or the dealership was dishonest.  They did a great job and we were happy with their service.  But we came to realize that adding a car payment adds stress to your life.  We discovered between the interest paid to finance the car and the rapid depreciation, financing is just a bad deal.

We Financed Our Next Two Cars

You would think after figuring that out that we would change our ways so our actions would match our beliefs, but no.  We traded in that car after a few years and financed two more within a year of each other.  It was a boneheaded move because we really hadn’t saved any money even though we knew at some point we would need another car.

After a couple of years of two car payments though, we finally decided that enough was enough, so we made a plan.  We decided once we got these cars paid off we would drive them as long as we could (our goal was at least 250,000 miles) and put the money we'd been spending on car payments in the bank to save for the next car.

So as we got the cars paid off and began saving, it was great to see the bank account moving upward instead of being drained by monthly car payments.  After a few years of saving we were able to pay cash for a sweet, barely used Infiniti.

Man did it feel good to be able to pay cash for that vehicle instead of signing a note committing us to years of payments.  I actually laid down $20,000 in cash on the salesman's desk at the dealership. Boy, was he surprised! What was once a financially stressful thing to do was now a joy!

That’s what I’m talkin’ about!

We Gave Our Car Away

Paying for the car with cash also had the side benefit of allowing us to be more generous.  We were able to give away our old car to a friend’s daughter who just graduated college and had no transportation to her first job.  More joy!

This is what happens when you start using your money more wisely.

“That’s great” you might say, “Maybe you were able to do it without any problems.  But what if my car completely dies before I have enough money to get the car that I want?”

Well, if you saved your money after you paid off your vehicle, you’re still ahead of the game.  Let’s say your car dies and you've saved up $3,000 in your car account.  You go out and buy a $3,000 car.  Then keep saving and in a year or two sell that car.  Next, put your savings with the proceeds and move up to a better one.  You can repeat that more than once until you get the type of car you want.

The point is, you don’t have to keep sending payments to a finance company every month.  You don't end up spending 20-30% more for your car because you financed it.

This process works.

Believe me, it works like a charm.

When you follow this simple principle you’ll never have a car payment again.  You just have to decide to do things differently.

Angie and I are living proof and it feels so good!

Resources:

4 Steps to Eliminate Car Payments Forever

Top 10 Money Myths That Keep You in Financial Bondage

Resources and Recommended Products- Tools You Need to Succeed

Reader Interactions

Comments

  1. Dr. Cabler says

    February 1, 2012 at 9:54 am

    That’s awesome, keep it up! Once people realize that it really is achievable to pay cash for all your cars, they wonder why they ever financed one. It’s just not that hard to do, you just have to decide to do it.

    Reply
  2. Paul Weaver says

    February 1, 2012 at 9:45 am

    Great story. I will have my car paid off this month, WOOHOO!! I had signed up for a two year loan, but am paying it off two years early. I hope to drive my car for at least 4 years, and will be stashing every penny of that car loan money away in savings. My goal is to always pay cash for any future vehicles. Congrats to you on already implementing this.

    Reply

Trackbacks

  1. Genius steals rolex during robbery trial says:
    June 26, 2014 at 9:52 pm

    […] despite the burden, when it comes to getting the next new car, the next roomful of furniture (no payments until 2067!), or whatever it may be, we keep coming […]

    Reply
  2. 13 Ways To Save Money On A Low Income says:
    June 19, 2014 at 4:18 pm

    […] it can be especially hard to save money for things like an emergency fund, college, retirement, cars, or anything else.  We all have our lean times financially, but even in those lean times you can […]

    Reply
  3. 21 Things You Can Do Today to Set Up Your Finances For Massive Success says:
    May 23, 2014 at 9:13 am

    […] you can pay cash for your next car.  I’ve done it twice now, and it feels so great to not have car payments any more!  Here’s how you can pay cash for your […]

    Reply
  4. % off MSRP - Acura MDX Forum : Acura MDX SUV Forums says:
    October 31, 2013 at 10:37 pm

    […] How not to finance a car Its not wise in my experience. Yes, my first car was a 61 rambler, for cash. __________________ Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness, Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. […]

    Reply
  5. Being In Debt is NOT a Necessary Part of Life | Enemy of Debt: Where Behavior Meets Reality says:
    September 11, 2013 at 11:04 pm

    […] How Not to Finance a Car […]

    Reply
  6. Is It Wise to Loan Money to Family and Friends? says:
    July 20, 2013 at 10:42 pm

    […] need to buy some lunch” loan here.  I’m talking about the “I’m behind on my bills”, “My car just died”, or “My cat needs an operation” loan for hundreds, or thousands of […]

    Reply
  7. Money Making Idea #2- Buy and Sell Used Cars says:
    May 29, 2013 at 10:24 am

    […] willing to invest into making extra money, you can make an excellent return on your money when you buy a solid used car, clean it up, have any minor problems fixed, and resell […]

    Reply
  8. Why You’re In Debt and What You Can Do About It says:
    May 13, 2013 at 3:07 pm

    […] When you’re in debt, you are paying money in interest and fees that could be used for things that are much more useful.  Debt causes you to spend much more than you otherwise would on the things you want and need (read about how we overpaid for our car). […]

    Reply
  9. Lease a Car vs. Financing, Which is Better? says:
    August 30, 2012 at 4:13 pm

    […] How Not to Finance a Car […]

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

Follow Us!

Follow Us on FacebookFollow Us on TwitterFollow Us on LinkedInFollow Us on PinterestFollow Us on YouTube

Welcome to CFF

Sidebar- Divine Art of Money

Visit Our Etsy Shop

Premium Finance Worksheets
Rakuten
How to start a blog in 6 easy steps
How to budget book

How to Get Out of Debt- The Ultimate Plan for Getting Out of Debt Even if You Have No Money

The Ultimate List of Money Saving Tips So You Can Save More Money on Everything!

How to Start a Blog in 6 Easy Steps- The Best Tutorial

The "How to Make Your Own Life Plan" Series

The "Ten Commandments For Making Money" Series

The "Money Making Ideas" Series

WHAT ARE YOU LOOKING FOR?

  • Home
  • Blog
  • Get Started
  • Tools
  • Courses
  • Budgeting
  • Hot Topics
  • Start a Blog
  • About Us

Copyright © 2011-2025 · All Rights Reserved · Celebrating Financial Freedom | Privacy/Disclaimer | Affiliate Disclaimer | Terms of Use | DMCA Policy

Copyright © 2025 · Smart Passive Income Pro on Genesis Framework · WordPress · Log in

1912 shares